JOURNAL OF ECONOMIC THEORY 53, 1-l 1 ( 1991)

A New Approach to the Existence

of Equilibria in Vector Lattices*
ANDREU MAS-COLELL+

Department of Economics, Harvard University. Cambridge, Massachusetts 02138

AND

SCOTT F. RICHARD

Cumegie-Mellon Universit)

Received July 20, 1988; revised April 17, 1990

Motivated by recent work of Huang and Kreps it is shown that the existence of
a general equilibrium in an exchange economy whose commodity space is a vector
lattice is guaranteed if (in addition to standard hypotheses) the price space is also
a lattice. This is very weak in contrast with the usual requirement that the topology
of the commodity space be locally solid (i.e., continuity of the lattice operations),
a condition violated in models of Jones and of Huang and Kreps. The key to our
proof is a disaggregated approach to the construction of supporting prices. Journal
of Economic Literature Classification Numbers: 021,022. F: 1991 Academic Press. Inc.

1. INTRODUCTION

In a recent and quite stimulating paper C. Huang and D. Kreps [S]

have proposed a new model of intertemporal preferences designed to
capture the possibility of lumpy consumption. Huang and Kreps subjected
their model to several soundness tests but one issue they did not explore
is to what extent their model lends itself to establishing the existence of a
general equilibrium.
It turns out that the Huang-Kreps model is not covered by available
equilibrium existence theory for an interesting reason. All the current

* Our debt to C. F. Huang and D. Kreps will be obvious. The problem treated in the paper
was proposed to us by them. R. Aliprantis, C. F. Huang, and W. Zame gave helpful and
patient answers to our many consulations. The paper was presented at the NBER General
Equilibrium Conference held at Stanford, March 1987. Thanks are due to the audience and
also to R. Anderson and G. Morin for a very careful reading.
+ NSF support is gratefully acknowledged.

1
0022-0531/91 $3.00
Copyright 8c-i 1991 by Academic Press, Inc.
All rights of reproduction m any form reserved
2 MAS-COLELL AND RICHARD

results (e.g., Mas-Cole11 [14]; seeAliprantis, Brown, and Burkinshaw [2]

and Mas-Cole11 and Zame [ 151 for general overviews) require that the
commodity space be a vector lattice (Huang and Kreps’s is) which
moreover satisfies the condition that the lattice operations be (uniformly)
continuous, i.e., that the space be a topological vector lattice or, equiv-
alently, that the topology be locally solid. Huang and Kreps’ topologies are
not locally solid.
We were certainly aware that the continuity of the lattice operations was
not a minor hypothesis. But in fact most of the infinite dimensional models
that had arisen in applications could be treated by the topological vector
lattice theory. The exception was L. Jones’ [9] commodity differentiation
model (see also Mas-Cole11 [ 12]), to which Huang and Kreps is closely
related, but even there the general methods were partially useful and at any
rate Jones had succeededin proving a general existence theorem by space
specific arguments. So we had left well enough alone. It is the Huang and
Kreps model that has convinced us that well enough is not good enough
and that a reexamination of the basic existence theorem in warranted.
Perhaps surprisingly, given the mathematical centrality of the concept of
locally-solid topologies, it turns out that this topological requirement can
be largely dispensedwith.
Specifically what we do in this paper is to free the existence theorem in
Mas-Cole11 [14] from the requirement that the topology be locally solid.
Only a minor restriction is retained: we require that the price spaceitself be
a lattice. (Informally, that the pointwise maximum of two price functions
be an admissible price function.) A well-known example by Jones estab-
lishes that this is indispensable. But it is a weak condition satisfied both by
Jones’ model and by Huang and Kreps’ [S], which does thus pass the
existence test. In every other respect the hypotheses of this paper are as in
Mas-Cole11 [14]. Although the general strategy of our proof is as in the
latter paper, it goes without saying that the essential steps (construction of
supporting prices to weak optima and verification of upper hemicontinuity
and convex valuedness properties) are very different. Nonetheless we still
rely heavily on lattice theoretic arguments on the space and, a novelty of
this paper, its dual.
Section 2 states the result. Section 3 is devoted to comment. The proof is
in Section 4.

2. MODEL AND MAIN RESULT

We consider economies in which the commodity space, L, is a vector

lattice (or Riesz space) endowed with a Hausdorff, locally convex topology
5. We assume that the positive cone of the space, L + = {.x E L: x 3 0}, is
 EQUILIBRIA IN VECTOR LATTICES 3

r-closed. Note that we do not require that L be a topological vector lattice;

i.e., it is not necessary that the order operations be uniformly continuous.
(See Aliprantis and Burkinshaw [ 1I.)
We require that prices be chosen in the topological dual of L, denoted
by L*, which is the set of continuous linear functionals on L. Furthermore,
we assume that for any p, q E L* the functionals p v q, p A q are con-
tinuous. More precisely, with the positive cone L*, = {q E L: q. 2 2 0 for all
z30}, we require that L* be a sublattice of the order dual. In particular,
for p,qEL* andz>O, we have (pvq)(z)=sup{p.z,+q.z,:z,+z2=z,
21, z2 3 O}. (See Aliprantis and Burkinshaw [ 11.) Typically, if p, q are
functions then p v q is simply their pointwise maximum.
Consider a trade economy with a set of consumers N= { 1, .... H}. Con-
sumer i is endowed with W,E L, and a preference relation 2 i on L,
which is convex, monotone, and continuous on L + . Let w = Cic N oi. We
assume o # 0. We say that 2 , is w-uniformly proper on L + if there is a
neighborhood of zero, Wi c L, such that y - CIO+ z 2 i y, y E L + for c(> 0
implies that = $ c(Wi (see Mas-Cole11 [ 141 for more on this definition). We
assume that 2 i is o-uniformly proper for all ic N. It is immediate that
this implies that 2 i is o-nonsatiated in the sense that y + CLW>i y, CI> 0,
yEL+. It has been established in Richard and Zame [ 161 that the uniform
properness condition is implied by (and is essentially equivalent to) the
extendibility of 2 i to some set with nonempty interior.
We assume that the order interval [0, o] = {z E L: 0 <z Q co} is
a(L, L*)-compact. Of course, if the topology of the space guarantees that
every order interval is a(L, L*)-compact then the hypothesis is automati-
cally satisfied.
Let X= {XE L:: CisN xi = w > be the set of (exactly) feasible allocations.
A quasi-equilibrium is a feasible allocation x E X and a price rcE L*, , z # 0,
such that for every in N:
(a) if y 2 i xi, then 7~. y 2 7c‘xi; and
(b) 7c~xi=lT~wi.
We now state our main theorem, but defer the proof until Section 4.

THEOREM. Under the hypotheses that every 2 i is o-uniformly proper

and that X is a(L, L*)-compact there exist an x EX and a II EL*, such that
(x, n) is a quasi-equilibrium with TC.w > 0.

3. DISCUSSION

If L is a topological vector lattice then L* is automatically a sublattice

of the order dual (Aliprantis and Burkinshaw [I]). Therefore our theorem
4 MAS-COLELL AND RICHARD

generalizes the results that rely on locally solid topologies which, in turn,
constitute a generalization of the seminal work of Bewley [7] for the
space L, .
To be specific we have required our compactness hypothesis to be the
a(L, L*)-compactness of X. But as in Mas-Cole11 [ 141 a weaker condition
suffices, namely the compactness of the utility set 0 = { (ur , .... uN): 0 < U, <
ui(xi) for some x E X}. Also, the careful reader will realize that without a
word of the proof being changed, the theorem remains valid if “o-uniform
proper” is interpreted as “o-uniform proper on [0, 01.”
The most interesting applications of our theorem are, of course to exam-
ples not covered by previous theory. Generally speaking, those are likely to
occur whenever L has a weak topology or when L, is small.
The commodity differentiation model studied by Jones [lo] corresponds
to L = ca(K), K compact, L, = (2 EL: ,-(A) 2 0 for every Bore1 set A c K},
and the weak-star topology on L. Here the topology is too weak for the
lattice operations to be continuous. (For K= [0, 1] consider hllk - 6, as
k + 0.) Nonetheless, Jones’ model is included in ours since L* = C(K), with
the induced positive orthant, is a vector lattice (more precisely, a sublattice
of the order dual). Also, our uniform properness condition (which has a
Lipschitz-like character) is somewhat weaker than his smoothness-like
hypothesis. For example, with K= [0, l] the utility function U(X) =
min{ .u( [0, 1I), 3 + x( [0, 11) - i j t tix(t)} is admissible by us but not by
him.
The family of intertemporal preferences models of Huang and Kreps
provides another example. The simplest specimen of the family is
L = (right continuous functions of bounded variation on [0, l] } with the
II.11I norm and positive cone L, = {x E L : x is nonnegative and non-
decreasing}. Equivalently, L = ca( [0, 11) with the standard positive cone
and the topology induced by the duality with C,(K), the Lipschitz con-
tinuous functions on [0, 11. Here the positive orthant L, is too small for
the lattice operations to be continuous. However, for this space the dual is
L,([O, 11) (equivalently L* = C,([O, 11)) which with the induced order
can be shown to be a vector lattice. (This is obvious for the equivalent
form.) Moreover, order intervals are weakly compact. Hence all the struc-
tural conditions of our theorem are satisfied (see Huang and Kreps [8] for
all this).
Our theorem also throws light on a well-known example of Jones. In it
L = L, ([0, 11) is endowed with the weak topology induced by C’( [0, 11).
There are two consumers with utility functions U, (x,) = l; tx, (t) dt,
u2 (x2) = sh (1 - t) x2(t) dt. Initial endowments are o1 = $e, w2 = $e, where
e is a constant positive function. It is immediate that for this economy there
is no equilibrium with continuous prices. Heuristically the failure of
existence in the example is due to L*, not making L* into a vector lattice.
 EQUILIBRIA IN VECTOR LATTICES 3

(Recall that L*=C’([O, 11) and L*, = {x~L*:x(t)kO, all t>; since the
supremum of two differentiable functions need not be differentiable, L* is
not a lattice.) The theorem makes this point sharply. Indeed, that L* is a
vector lattice is the only hypothesis of the theorem that Jones’sexample
fails to satisfy. The example has a very pathological feel to it: the obvious
candidate to a quasi-equilibrium price vector fails to qualify simply because
it is decreed not to be continuous. It could be argued that as long as L is
a vector lattice, any problem which is well-posed from the point of view of
existence should have a price space that can be viewed itself as a lattice.
What about the hypothesis that the consumption set, denoted by Xi, is
the positive orthant L, of a vector lattice? An example of Back [6] shows
that it cannot simply be replaced by Xi being closed, convex, and satisfying
A-;+ L, CXiCL,. But we do not know how far it can be relaxed. At any
rate, the hypothesis is central to our proof for the following reason: Let
p,EL*, i=l,..., N be arbitrary and, for any ~30, define n(z) =
sup{~i~Npi.z-i:~iEL+, CitNZI=“,. -’ If L, defines a lattice order then
(because the order has the so-called decomposition property) rc(.) will be
linear. This is essential to us site we construct supporting functionals in
precisely this way.
If a preference relation is continuous and w-uniformly proper in one
topology then it will remain so in any stronger topology. This means that
for a given duality (L, L*) the sharpest theorem lets the topology of the
space be the Mackey topology.
It is easy to generate preferencesto which our theorem is applicable. For
example, let Jc L*, be a(L*, L)-compact with every q EJ o-increasing. Let
u: R x J+ R be jointly continuous with u( ., q) concave and increasing for
every q EJ. Finally, let p be a regular measure on J. Then the function
u(z)= j u(q .z, q) c@(q) defined on the entire L is Mackey continuous,
concave, and o-increasing. The restriction of u to L, yields a preference
relation which satisfies all of our conditions.
Recall from Richard and Zame [ 161 that a sufficient condition for
w-uniform properness on [0, o] is that 2 I be representable by the
restriction to the positive orthant of a continuous, quasiconcave function ui
increasing in the w direction and defined on a convex set which contains
L, and has nonempty interior. Hence, in particular, if L, has nonempty
interior to start with, then w-uniform properness on [0, o] follows from
o-desirability.
Can uniform properness be weakened to pointwise properness (a
necessary condition for individual supportability at any consumption vec-
tor)? An example of Richard and Zame [16] shows that the answer is no.
Nonetheless, recent work by Araujo and Monteiro [4] suggests that in
some particular contexts there may be room for weakening the uniformity
requirement.
b MA.9COLELL AND RICHARD

An extension of the results in this paper for an economy with production

can be found in Richard [ 171.
For an investigation of the necessity for existence purposes of the lattice
property on the dual see Aliprantis and Burkinshaw [3].
A problem (raised by a referee) which we have not studied is to what
extent requiring the price vectors to belong to L*, i.e., to be continuous,
does or does not bias the allocations that can be obtained. The natural
conjecture is that under the hypothesis made any allocation sustainable as
a quasi-equilibrium with a price vector not in L* can also be sustained
with a price vector in L* (note that this regularization statement is weaker
than the false assertion that all quasi-equilibrium price vectors belong
to L*).

4. PROOF OF THE THEOREM

In this section we prove our theorem. First we establish a proposition

stating that any weak optimum can be supported by a price vector which
is the maximum of vectors supporting the individual preferred sets. A
similar characterization of supporting prices was proved in Mas-Cole11
[ 133 for the simpler case where each 2 1 is representable by a utility func-
tion, concave, and continuous on L and having a gradient at each point
XiEL,. Then we use this proposition to prove the existence of a quasi-
equilibrium. As in Mas-Cole11 [14] we follow the convenient Negishi
approach to existence theory (also used by Arrow and Hahn [S], Bewley
[7], and Magi11 [ll]). The heart of the proof, however, is markedly
different from Mas-Cole11 [14]. This is to be expected since there the
continuity of the lattice oeprations is used in an essential way and in our
weaker set-up this property is not available.
The hypotheses of the theorem are assumed throughout the proof.
An allocation XE X is a weak optimum if there is no other allocation
x’ E X such that x( >i xi for every i E N. A weak optimum, x, is price sup-
ported if there exists rt EL*, 7~# 0, such that xi 2 i xi implies that n. xi 2
rc . xi for every i E N. The following lemma contains our basic separation
argument. The novelty is that the argument is entirely disaggregated (i.e.,
upper contour sets are never added up). It is this which allows us to
dispense with the use of the lattice decomposition property and the local
solidness of the topology.

LEMMA 1. There is a o(L*~, L” )-compact, convex set KC L 2, such that

x,, N pi. w = 1 for all p E K, and for any weak optimum, x, the set
 EQUILIBRIA IN VECTOR LATTICES

P(x) = p E K: for all i, p, .x( 2 pi. X, whenever .u,! 2 i .Y,

and 1 pi..xi > c p, .x: whenever X’E X

itN itN I

is nonempty, c0nve.q and o(L*“, L”)-compact.

Proof. Let W= W,x ... x W,, c L” where Wj is from the definition of
uniform properness. Without loss of generality W t L” can be taken to be
a circled (i.e., W= - W), convex, open neighborhood of zero. Define
K = {p E Ly: ICisNpi . w,I d 1, w E cl W, and CieN pI w = 1). By
Alaoglu’s theorem (Aliprantis and Burkinshaw [ 11) K is o(L*“, L”)-
compact.
Let ri c L be the open, convex cone spanned by (0) + W, and put
S;=(ziEL+:zi k,Xi}. V, = Sj + r,, and I’= V, x . . x V, c L”. Note
that Vi is convex and open and that x, Ecl Vi. Becauseof uniform proper-
ness, if ii E V, n [O, w] then Z~>i xi. In particular, X, C$Vi.
We must have X n I/ = q5since otherwise there is z EX such that zi >; xi
for all iE N, contradicting the weak optimality of x. By the Separation
Theorem (Aliprantis and Burkinshaw [ 11) there is p EL*n, p # 0, such that
ESN Pi.-xi2Ci~N Pi’=, for all z-EX, and ~isNp,~~i>~ieNpi~~~I for all
v E V (recall that x~cl V). This implies that pi. vi> pi ‘xi whenever
ri 2 i xi. Since L, + (xi) c S;, we have p ELT’. Because (xi + w} + Wi c
Vi, we have CitN pi. (0 + M’i) > 0 for all w E W. In particular Cic N pi. 0
> 0. We are therefore free to normalize p so that CieN pi. o = 1, in
which case lCleN pi. uril d 1, MJEcl W. Hence PE K. We conclude that P(x)
is nonempty; that it is convex and compact follows from the definition of
the set. Q.E.D.
If pEL*“, then ‘II = VIE N p, is, by hypothesis, a linear functional on L.
For ZEL, it takes the values n .Z = sup(CieN pi .ri: ~~30 and
CitNZi=Z}, zEL,. If for same zEL+ the order interval [0, Z] is
a(L, L*)-compact, then the sup is realized because we are maximizing a
CT(L”, L*“)-continuous function on a a(L”, L*“)-compact set.
We are now ready to state and prove our proposition.

PROPOSITION. Let x E X be a weak optimum. If R= Vie ,,,pi for p E P(x),

then x supports x. Moreover, TTEL*,, n.o>l/n, ~c.w=C~~~~~.X,, and
rc.x,=pi..Yifor all i.
ProoJ: Since p EP(X), we have pi> 0 for all ie N, implying x 2 0.
Furthermore, the definition of n and p E P(x) immediately yield that
rcr(no)d~icNpi.co=l and n.o~=C~~~p,..~~.
Suppose that z k i xi. Since 7~2 pi, we have 7~.Z 2 p, .z 2 pi. xi because
PEP(X). If z..~~>p~.x, for some i, then x.o=C;~~X.X,>C~~~~;.X,
8 MAS-COLELL AND RICHARD

which contradicts the fact that PEP(~). Hence 7~‘xi= pi. xi and so
rr .z k x .-xi whenever z 2 , xi, as we wanted to prove. Q.E.D.
Denote by A the n - 1 dimensional simplex. We now proceed to specify
a correspondence,

@:A+T= tER”: c ti=O ,

{ ieN I
whose zeroes correspond to quasi-equilibria.
For every i, let ui: [0, o] --) R be a continuous function representing
ki on [0, w]. Such a function exists (see Richard and Zame [16]).
We can scale ui so that ~~(0) = 0 and ui(o) = 1. The set L? =
{(u 1, .... uN) : 0 d U, d ai for all i and some ?cE X} is compact because X
is [T(L”, L*“)-compact and each ui( .) is a(L, L*)-upper semicontinuous (the
closed sets {z E [0, w] : 2 2 i xi} are convex, hence o(L, L*)-closed).
For every SEA define j”(.s)=max{crER:asEii} and X(s)=
fx E x: U(x) >f(s)s}. Of course, every member of the (nonempty) set X(x)
is a weak optimum. Also, monotonicity and r-continuity of preferences
imply that for every s there is VEX with ui(.ui) =S(s)si for all i.
Finally, define @: A + T by

Q(s)= (7c~(01-x,) ,...) 7c’(W,*-x,)):XEX(x)

i
and rr= V pi for some PEP(X) .
ilEN 1

Because of the proposition the zeroes of @ yield quasi-equilibria.

LEMMA 2. The function f: A + R is continuous and the correspondence

X( ‘) : A -+ X is convex valued and u.h.c. (for the u(L”, L*n)-topology on X).

Proof. The continuity of f was proved in Mas-Cole11 [14,

pp. 1045-10461. The convexity of X(s) is an obvious consequence of the
definition. Because X is a(L”, L*“)-compact it suffices, in order to prove
u.h.c., to show that for any nets {s”} t A converging to s E A, and {x”} c X
with .xk E X(8) c+L”, L*“)-converging to x E X, we have x E X(s). Clearly
CieN xi < w. Furthermore, each ui is a(L, L*)-upper semicontinuous so
that lim sup a,($) Q ui(xi), which implies that f(s)s G U(x). Q.E.D.
Remark. If X and K are metrizable then nets can be replaced by
sequences in the above and all subsequent proofs.
The next lemma will allow us to prove the u..h.c. and the convex valued-
ness of Up.
 EQUILIBRIA IN VECTOR LATTICES 9

LEMMA 3. Consider nets (x”} c X, and (p”} c K such that xk is a weak

optimum which satisfies xi6 N xf = o and a(L”, L*‘)-converges to x EX, and
such that pk belongs to P(x”) and a(L*“, L”)-converges to p E K. Denote
xk=VieNp$,z=VieNpI. Then:

(a) ?ck.z+7r~zforallzE[O,w],
(b) rk ..xf + 71‘xi for all i, and
(cl P E P(-~).
Proof: Part (a). Take any ZE [0, 01. Since [0, o] is compact, so is
[O,z]. Let rc.z= ClaNpi.zi, zi>/O, CleNzj=z. Then 7ck.z3CiaNp:.zi
for all k. Hence lim inf rrk . z 2 CiG N p, zi = rt . z. Since the same inequality
holds for w-z it suffices to show that lim sup rrk. w d II. o. Since
w = CicN .xp this is implied in turn by lim sup rck..$ d n. -Y,. Fix E> 0.
Because every 2 i is a(L, L*)-upper semicontinuous we can assume that
ri + EO>i xf. Hence pf . (?ci+ EW)2 p” xf. Taking limits and letting E+ 0
we get lim sup pf. .xf d pi. xi. But, by Lemma 1, pf. xf = rck x;. Further-
more, pi d rc implies pi. .yi < z . x,. Hence lim sup rck.x: < ?L. x,, as we
wanted.
Part (b). From the definition of rc’, rck. o 3 C,, N pf . x,! for all x’ EX.
Hence lim inf nk . w 2 Cie N pi. xi for all x’ E X. In particular,
lim inf rrk . o 3 z . w. Therefore lim inf C,, N rrk .xF2 C,, N rr . xi. Since
lim sup nk .t$ < rr . .Y, for all i, as proved in part (a), we conclude
7ck. J$ + n xi for all i.
Part (c). For arbitrary E> 0 we eventually have xi + EWti $. There-
fore pk.x,+~p1(.0>pF. .$. Hence pi. x, b lim sup pf . xk. Suppose that
pi.x, > lim sup pf: ..Y; for some i Because xjG N pr .xf 2 xi, ,,,p’. xi we
then have

lim inf 1 pf .*of;> C pi .xi > 1 lim Sup p: . Xf >, lim sup pf . -xf
I 1 I

which is a contradiction. Therefore pi. xi = lim sup pf . xf for all i. But

pf ..Y: = rrk. xf and, from part (b), lim sup rrk. xf = 71.x,. Hence
pi. xi = 71 xi.
Obviously p E L*,n and CitNpi.~= 1.
If z 2 1.Y, then for arbitrary E> 0 we eventually have z + EWsi x”. Hence
pfi.Z+&p;.O>p;.X;=nk .x:. Taking limits and letting E+ 0 we get
pi.z>,71.xi=pi..Y,.
Now consider an arbitrary x’ EX. We have xi, N pf .xi d C, E,,,pr xt =
c rsN = k . .$. Taking limits, C, EN pi. x: d 1, ENR . xi = Cit N pi. xi.
Therefore, p EK. Q.E.D.
A simple consequenceof Lemma 3 is:
10 MAS-COLELL AND RICHARD

LEMMA 4. @I A -+ T is upper hemicontinuous (u.h.c.).

Proof First note that @(A) is contained in a compact subset of T since

17c~(0;~xi)ld7c~o= ,~Npi.xiG c p;.o=l.

itN

Let sk -+ s, sk EA, and tk + t, tk E @(sk). Choose .xk EX(sk), pk E P(xk)

with t: = rck. (oi - x;), rck= Vie ,,, pk. By going to a subnet we can assume
that {x”} (T(L”, L*‘)-converges to an x E X, and ( p”> a(L*‘, L”)-converges
to a PE K. Denote n = VicN pi. By Lemma 2, XEX(S). By Lemma 3,
p EP(x) and ti= lim rrk. (oi - xf) = n . (w -x,). Therefore t E Q(s). Q.E.D.
It is not immediately obvious that @ is convex-valued. Nonetheless,

LEMMA 5. @ is convex-valued.
Proof: Fix an SE A and choose XE X such that ui(xi) =f(s)s, for all i.
We show first that if x’ E X(s) then pi .x; = pi. xi for all ig N and
PEP(X). Indeed, pi.32 pi.xi whenever z 2 i.x,. Since ui(xi)a ui(xj) we
have pi.xid pj.xj for all i. But zieN p, .xib xiEN pi.xi because X’E X.
Therefore pi. xi = pi. xi for all i. But CiG N pi. xi > Cit N pi. x: because
x’ EX. Therefore pi. xi = pi. .x: for i EN. An immediate consequenceof this
is that P(x) = P(x’). From now on we put P(s) = P(x), XE X(s). Clearly,
the set P(s) is convex.
Let t’, t* E a(s) and, correspondingly, take x’, .x2E X(s), p’, p* E P(s).
For any CIE [0, 11, denote p’ = ap’ + (1 - cr)p* E P(s), and rra = ViEN py.
It suffices to show that rcoL(wi - xf) = (car’ + (1 - cl)rc’) . (wi- .x;) =
crt’ + (1 - CI)t*; of course, only the first equality needs proof.
We prove a stronger property, namely that rca.z = (CIII~+ (1 - c1)rc2).Z
for all ZE[O,U]. Because ~‘.~=C~~~pf.xI=C,.~p!.xf and ?r*.a=
c,,,pf.xf we have (~1~‘+(1--)7~*).0=~~,~p~..~~=.~.w. The last
equality follows from pz E P(s). For ZE [O,w] and C(E[0, l] let ~9, igN,
be such that 2’ > 0, Cit N ~4 = L, and rca. z = Cic N p’. ~-4. (Note that the
superscript in the definition of rr’ is realized because [0, z] c [0, o] is
a(L, L*)-compact.) Then

7-ca.z=ct 1 pj.$+(l-.) 1 pf.z’

iEN iEN

<cr c p;.z; +(1-cc) c pf.zp=(ct~l+(l-cr)7c*).=.

icN isN

Similarly, because(o-z)E[O,U], n~.(0-~)~(~17~‘+(1--~)~*).(0-z).

Therefore, using 712.0=(~71’+(1--)712).0, we conclude z~.z=
(ox1 + (1 - ~)7c*) .z for all z E [0, 01.
Hence @is convex-valued. Q.E.D.
 EQUILIBRIA IN VECTOR LATTICES 11

LEMMA 6. Ifsi= and ME@ then ti>O.

Proof: If si=O then f(s)s, = 0. Hence oi 2 i xi for any x EX(S). Let

XE X(S), p EP(x) and 7~= VicN pi generate t. Because 7~supports xi we
have ti=~b(~,-~Xi)>O. Q.E.D.
By Lemmas 4, 5, and 6 the “vector field” s + a(s) on A is u.h.c., convex-
valued, and inward pointing at the boundary. Therefore, it has a fixed
point; i.e., there is s* such that OE @(s*). In other words, there are .UEX
and p E K such that for 7~= VIE N pi, (x, n) constitutes a quasi-equilibrium.
Also, z.w>CiGN p;((l/n)o)= l/n.
This concludes the proof of the theorem.

REFERENCES

I. C. ALIPRANTIS AND 0. BURKINSHAW, “Positive Operators,” Academic Press, 1985.

2. C. ALIPRANTIS, D. BROWN, AND 0. BURKINSHAW, “Existence and Optimality of
Competitive Equilibria,” Springer-Verlag. Berlin/New York, 1989.
3. C. ALIPRANTIS AND 0. BURKINSHAW. When is the core equivalence theorem valid? J. Econ.
Theory (1991), forthcoming.
4. A. ARAUIO AND P. MONTEIRO, Equilibrium without uniform conditions, J. Econ. Theor?,
48 (1989), 41&427.
5. K. J. ARROW AND F. HAHN. “General Competitive Analysis.” Holden-Day, San
Francisco, I97 I.
6. K. BACK, Structure of consumption sets and existence of equilibria in infinite-dimensional
spaces, J. Math. Econ.. 17 (1988), 89-100.
7. T. BEWLEY, Existence of equilibria in economies with infinitely many commodities,
J. Econ. Theory 4 (1972). 514-540.
8. C. HUANG AND D. KREPS, “Intertemporal Preferences with a Continuous Time Dimen-
sion,” Sloan School Working Paper, 1986.
9. L. JONES, A competitive model of product differentiation, Ecopzon~erricu 52 (1984),
507-530.
10. L. JONES, Special problems arising in the study of economies with infinitely many com-
modities, in “Models of Economic Dynamics” (H. Sonnenschein. Ed.), Springer-Verlag,
Berlin/New York, 1986.
11. M. MAGILL, An equilibrium existence theorem, J. Math. Anal. Appl. 84 (1981), 162-169.
12. A. MAS-COLELL, A model of equilibrium with differentiated commodities, J. Math. Econ.
2 (1975), 263-296.
13. A. MAS-COLELL, Valuation equilibrium and Pareto optimum revisited, in “Contributions
to Mathematical Economics” (W. Hildenbrand and A. Mas-Colell, Eds.), Chap. 17,
North-Holland, Amsterdam, 1986.
14. A. MAS-COLELL, The price equililibrium existence problem in topological vector lattices,
Econometrica 54 (1986), 1039-1053.
15. A. MAS-COLELL AND W. ZAME. Equilibrium theory in infinite dimensional spaces.
prepared for the “Handbook of Mathematical Economics,” Vol. IV (W. Hildenbrand and
H. Sonnenschein, Eds.), North-Holland, Amsterdam, 1991.
16. S. RICHARD AND W. ZAME, Proper preferences and quasiconcave utility functions, J. Math.
Econ. 15 (1986), 231-247.
17. S. RICHARD, A new approach to production equilibria in vector lattices, J. Math. Econ.
18 (1989). 41-56.